A portion of a GameCyte interview with Yoshinobu Matsuo, producer...

GameCyte: Why spend more money to improve titles that are already complete, instead of merely localizing the products that are already available in Japan?

YM: As mentioned above, we’re not permitted to use characters and story elements that are ahead of the US TV show’s timeline. Thus we cannot localize the Japanese Naruto EX series. Instead of taking the easy road and viewing the situation as a negative, we decided to create a completely new Clash of Ninja game and added characters- some that have never existed in any previous Clash of Ninja games, here or worldwide.

Full interview here